Daily Forex Market Commentary

The soft report on existing home sales hurt the dollar versus the European currencies ahead of the long weekend.
Dollar/yen slipped early on the day as well amid profit taking on carry trades, but news that the belligerent North Korea had a missile test helped it reverse the initial losses. The US currency remains overbought in the short term, so it should correct lower. But Monday should be very quiet.

Euro/dollar
Euro/dollar treaded water on Friday and should so the same today — but in a tighter range.

The pair must dig below 1.3410 to warrant more weakness. If this level breaks, look for a test of the support at 1.3375. Below this the Fibonacci retracement level there is support at 1.3275.

If 1.3410 holds, look for a rally to 1.3530. A close above 1.3545 would signal another attack on the upside to 1.3610.

Oscillators are declining.

NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bullish

Dollar/yen
Dollar/yen rallied from a one week low to a 3 1/2-month high of 121.89 on Friday and the medium-term outlook remains bullish.

Above 121.89 there still is resistance at 122.18. Next resistance comes at 122.50 from another 50-point pivot.

Key support level this week is at 121.05 from a 50-point pivot, which targets 120.55 and 121.55. Below 120.00, strong support comes at 119.65 from another 50-point pivot that targets 119.15 and 120.15.

Oscillators are rising.

NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish

Sterling/dollar
Sterling/dollar traded sideways in a tight range on Friday as well. It failed to break the top of its declining channel, so the pound should struggle lower. Short-term positions are long, so some long liquidation is likely.

Initial support is at 1.9790. Below 1.9715 there still is good support at 1.9655.

Strong resistance is still seen at 1.9900 from the top of its declining channel. If this level breaks, then look for a rebound to 1.9960. Above 2.0000 there is distant resistance at 2.0140.

Oscillators are mixed.

NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish

Dollar/Swiss franc
Dollar/Swiss franc consolidated on Friday, as expected. The medium-term outlook remains positive, but the pair should tread water today as well.

Immediate support is at 1.2240. This is followed by 1.2210. Below 1.2170, distant levels are 1.2095 and 1.2065.

Above the resistance at 1.2332 there is good resistance at 1.2370. Next target is 1.2437. Distant resistance looms at 1.2554.

Oscillators are rising.

NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Slightly bearish

Visit GFT to Learn More

DISCLAIMER: This forum and the information provided here should not be relied on as a substitute for extensive independent research before making your investment decisions. Global Forex Trading is merely providing this column for your general information. The views of the author are not necessarily those of Global Forex Trading, its owners, officers, agents or employees. In addition, any projections or views of the market provided by the author may not prove to be accurate. Global Forex Trading and Cornelius Luca will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained in this column. Global Forex Trading and Cornelius Luca do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.